State Trademarks Are Insufficient for Federal Protection

Intellectual Property: Trademark Rights: We have previously discussed the fact that the mere registration of a business with the State, or the registration of the business name with the State is insufficient to insulate business owners from individual liability. However, the other common misconception about these filings is that they protect the business name that is registered. It is critical that business owners understand the limitations of the protection that is offered by State registrations.

In New Jersey, registration of a corporate entity will protect that entity’s precise name from being registered by another company in New Jersey. There are a few important things to note here. First, it does not prevent another company from registering that name in another state. Second, it does not prevent another company from making minor changes to the name (i.e., the spelling) in order to register their entity in the State. And finally, the registration of a business entity does not necessarily prevent another party from using that name; all that would be prevented is the third party’s registration of the name. The rights at issue are really trademark rights, which are addressed by the law separately from corporate formation rights.

Some businesses prepare state trademark filings. However, it is important to note that this too has limitations. First and foremost the filing only applies to New Jersey, and only protects against infringement in New Jersey. Next, the state registrations generally operate as individual databases, so there is nothing stopping someone from registering the same or similar trademark, or using i, in a neighboring state.

The best way to protect a business name is to use it in interstate commerce (i.e., across state lines) and to obtain a Federal trademark registration through the United States Patent and Trademark Office. The Federal filing will provide additional remedies to a trademark owner in the event that the mark is used in a way that is likely to confuse consumers anywhere in the United States (and perhaps even beyond with some of the International Treaties that are in place). This is particularly important in the Internet age, where businesses generally have at least a regional or national presence and are not so localized. For example, if a business owner has a New Jersey-registered trademark, and they learn that a competitor is using the mark in Pennsylvania in an infringing manner, the State registration will not help the enforcement efforts. The mark owner would be limited to pursuing its claim under common law theories and would be unable to avail itself of the benefits and protections of a federally registered trademark.

Comments/Questions: ljm@gdnlaw.com

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